Project 82 - Financial protection in the building and construction industry

The reference arose from sustained evidence of problems experienced by the building and construction industry as a result of the practice of subcontracting. In a conventional building contract the client pays the head contractor, who engages other contractors (or subcontractors) to perform particular work or supply materials. Problems occur when there are insufficient funds available to pay subcontractors for work done or materials supplied, for example if the head contractor is declared insolvent.

Terms of Reference

In 1985 the Commission was given a reference to recommend what changes in the law if any (other than contractors’ liens and charges), should be adopted for the protection of the interest of subcontractors, workers and others in the building and construction industry in receiving payment for work done or materials supplied.

Outcomes

There have been no steps taken toward the introduction of a legislative scheme to implement the Commission’s recommendations.

The Building Legislation Amendment Act 2000 (WA) further regulates the registration of builders and contractors. However, this only indirectly deals with the issue and the Commission’s Recommendation 49 suggests that this is not an adequate measure of resolving the problem discussed in the terms of reference.